NCPA - National Center for Policy Analysis

States Ignoring Welfare Grants

February 8, 1999

More than half the states failed to use the full amounts of their federal welfare grants last year -- leaving the billions involved to pile up at the U.S. Treasury. By law, states can allow money to accumulate and draw on it when their needs increase.

  • States had an unused balance of $3 billion out of $12 billion available to them in the first nine months of last year, according to the Department of Health and Human Services.
  • In addition, six states passed up extra federal money available from the Labor Department to help move long-term welfare recipients into jobs.
  • State officials report that the number of people on welfare has dropped much faster than they expected -- making it difficult for them to use all the federal money they were entitled to.
  • Each state's annual allocation -- which was to remain steady for six years -- is based on federal spending in 1994 and 1995, when welfare spending and caseloads were high.

West Virginia, one of the poorest states, had an unspent balance of $72 million. But a spokeswoman for the state's Department of Health and Human Resources says it is "aggressively looking for ways to use this money," realizing that "if we don't spend the money in a timely manner, it will be extremely tempting for Congress to take some of it back."

Mississippi, however, passed up $13 million in federal funds for "welfare to work" activities. Donald R. Taylor, executive director of that state's Department of Human Services, said he understood why "the disciples of dependency, the self-styled defenders of the downtrodden," would question that decision.

But, he said, the state does not need the money. "We want to be a good steward of taxpayers' dollars," he added. "Why would you spend federal taxpayers' dollars to solve a problem if it's being solved without the application of those dollars?"

Source: Robert Pear, "States declining to Draw Billions in Welfare Money," New York Times, February 8, 1999.


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